Ben Gilbert: evaluation

Transcript context

…Yeah. I have heard him say that many times, too, in my research, and I occasionally hear him say the second part of the quote that he selectively leaves off. The second part is, "Anybody can sell goods for cheap. The trick is to make money while doing so." We've talked about a bunch of it in this episode. It's the 50 little things that they do that all synchronize with each other that makes it work. You don't do one of those and it falls apart. Oh, I want 10,000 SKUs. Oh, I want to be a leader in ecommerce. Oh, I don't want a membership fee. Oh, I want to blow out a bunch of merchandise and do a sale. Any of these trade-offs you break them, the whole thing breaks. There are so many fun, little paradoxical things about this company. They sell goods at the lowest possible price, but that means that they have a wealthy customer base. It always breaks my brain when I keep coming back to this point. I think it broke the brain of a lot of name brand companies too who refuse to sell at Costco. Until 10 years ago, a lot of brands just had this idea that low prices had too much of a negative signal about their brand. It took decades for Costco to prove that they really did care about quality that was part of their value proposition. Also, it took decades to prove that they could facilitate a huge amount of volume. They've won over everyone from Apple to Dom Perignon. I think this is a critical playbook theme for them. They've managed to create this walled garden inside of Costco. I use that in not the typical walled garden term of being consumer-unfriendly, you're keeping them in the walled garden. It's exactly the opposite. Within the garden walls of a Costco warehouse, whatever price products are, doesn't in consumers mind equate to their value or what their price should be outside of the walls of the garden.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.